A fully automated world



In recent years, it is not rare to find factories or warehouses with industrial robots. However, only a small portion of the workload is carried out by such robots. For example, about 80% of warehouse operations are still managed by manual labor. Until now, industrial robots could not replace people because the robots had to be taught specific operations, and they could only repeat the tasks they were taught. MUJIN, Inc was started to create a solution that embeds intelligence in industrial robots. In 2019, we announced our partnership with Fast Retailing Co., to accelerate full automation of warehouses. The future is bright for MUJIN. Looking back, it was UTEC that supported MUJIN from the seed stage. We talked to CEO and Co-founder of MUJIN, Mr. Takino about an ideal relationship with a venture capital firm.


SECTION01 : Liberation from hard manual labour



Liberation from hard manual labour

When people think of industrial robots, they visualize a robotic arm that does the operation. However, one needs a controller, i.e. “brain of the robot” to operate the arm. MUJIN has developed a solution that embeds intelligence into robotic controllers, and adds 3D vision-based "eyes" to enable the robot to make its own decisions while performing an operation. How will MUJIN’s innovation change the factories and warehouses of the future?

In Japan, the population is shrinking. However, this does not mean that we can afford to lose our productivity. So, how does one make up for a decrease in the number of people, and yet ensure an increase in revenues and profits? One of the solutions to this problem is to use industrial robots. Industrial robots are fast, accurate and work around the clock. They are the ideal workforce for factory or warehouse operations but in reality, they are not commonplace at all.

This is because of the fact that installation of industrial robots requires extensive “training” or programming, which makes it difficult and cumbersome. Furthermore, even if the “training” goes well, the robot is only able to perform a set operation that was taught. If there are any irregularities in the operation, the robots cannot adapt to the change. For example, the task of taking out and stacking items selectively that first comes in bits and pieces was difficult for robots, and could only be done by humans.

One might say that we should let humans continue to perform such tasks. I believe that would be the wrong approach. In recent years, warehouses and factories are struggling to hire new employees. They want to build facilities in remote areas to keep the real estate costs low. However, the more remote the facility is, the harder it is to hire employees due to limited access. Some workers in warehouses would walk more than 20km to perform tasks such as picking and placing. I am sure that the workers themselves want to be relieved from such repetitive, low-value tasks and dedicate their time to more challenging, higher-value tasks.

MUJIN uses a technology called Motion Planning to induce intelligence into the robots to enable complete automation of the operations in factories and warehouses. Specifically, the robots “see” with their 3D-vision-based eyes and decide for themselves without the need to explicitly train them every time to perform tasks. Chinese ecommerce giant has already installed MUJIN’s technology. Currently, 500+ robots have MUJIN’s controller installed on them.

SECTION02 : The ideal partner for a venture based on profound science & technology.



The ideal partner for a venture based on profound science & technology.

Nowadays, MUJIN is attracting attention from numerous manufacturers and retail companies, but when CTO Rosen Diankov (a post-doctoral researcher at The University of Tokyo) and Mr. Takino co-founded the company in 2011, they had really struggled to raise capital.

In the beginning, Rosen and I were working different day-jobs to make a living, as we could not raise capital to start R&D activites for our company. Also, 2011 was 2-3 years after the ‘Lehman shock’ during which many VC’s had stopped investing. We wanted to talk to VCs but there really weren’t many around. That was when Rosen had found out about UTEC and we visited UTEC to make a presentation.

At the same time, there were 2-3 other VCs that were also considering an investment in us. However, UTEC had absolute belief in us and were quick in their decision-making compared to the others. While others VCs told us “Come back to us after a month”, UTEC completed their due diligence and decided in a really short timeframe. It wasn’t that we needed money immediately, but I knew we couldn’t work very fast with a slow decision maker.

In August of 2012, UTEC invested 75 million Yen in MUJIN. My first impression of Mr. Ted Yamamoto, who was responsible for UTEC’s investment in Mujin, was that he was a tech-nerd. He never cajoles people, and hence he would not have been a great salesman, or so I thought (laughs). MUJIN is a hard and deep tech company, it has no shiny twinkles of a gaming company, for example. We thought Mr. Yamamoto who has his feet on the ground, and is a keen learner was a perfect investor for MUJIN.




MUJIN had a strong co-founding team of Dr. Diankov, who has a PhD in Robotics research from Carnegie Mellon University and Mr. Takino, who won many awards as a technical business development person from ISCAR. The only missing piece was experience in legal and accounting. When they were contemplating hiring a dedicated professional, they found UTEC’s support helpful.



The primary requirement for a tech company is talented professionals with a strong technology background. Once the product is made, the company would need an executive with a business background. In the meantime, there would be a requirement for legal and accounting work. However, if the company hires a dedicated administration professional, there wouldn’t be enough work. We needed someone to do the work, but not a full-time hire We were in a typical early-stage startup dilemma.
It was then that we found Mr. Yamamoto’s support helpful. For example, he would advice us from a legal perspective regarding the aspects of a contract that were risky, ascertain if we have properly filed a patent for a certain technology, and if we had not infringed on any trademarks.

He not only pointed out things that we did not realize, but also actually helped us solve them.

SECTION03 : We argued sometimes too.



We argued sometimes too.

In the ecosystem, UTEC is known as a VC that offers strong advise and suggestion to founders. Many of its portfolio companies have technology experts as founders, and they require advice from a business perspective. It was different in the case of MUJIN, as we had co-founders from both technology and business background. We (Mujin and UTEC) sometimes argued over points when our perspectives were not aligned.

An example is regarding hiring new employees. UTEC wanted us to hire employees as quickly as possible to set-up MUJIN on a growth path. On the other hand, we had set our hiring standards very high even during the time when no one knew about us. We did not want to lower our standards to speed up the hiring process. We communicated this with UTEC, and they understood.
I have such arguements with Rosen all the time, so it is an everyday matter for us, but perhaps UTEC was surprised. As we were able to argue with an equal stance, we were able to establish an ideal relationship between a VC and a technology venture on an equal footing.

FINAL SECTION : From an unusual exit to Building an Ecosystem




From an unusual exit to Building an Ecosystem

In February 2019, MUJIN’s co-founders executed a Management Buy Out (MBO) and purchased all of UTEC’s shares in MUJIN. IPOs are a normal exit for Japanese VCs, and MBOs are rare. Why did the founders choose to not do an IPO?

UTEC had approached us about an IPO. Normally, an IPO would be the choice. However, we felt it was still too early for us. If we go public then MUJIN will be known to the wider public and several businesses will approach us. However, as we do not have the supply system to meet this demand, we would have to ask them to wait. We feared that this would lead to a negative reputation.

Furthermore, MUJIN needs to be run from managements’ perspective that is long term due to the nature of the industry that we are in. If we IPO now, we would have to use our time and resources to convince many new investors. I had no intention of denying an IPO exit, but we also explored the possibility of MBO as an alternative exit scenario. In this regard, I had several discussions with UTEC’s Managing Partner Mr. Goji who helped us achieve an MBO exit, and enable MUJIN to continue on a path of long-term vision to change the future of warehouses and factories.

After the exit, though we no longer have a investor-portfolio relationship, For example, soon after the MBO exit, UTEC and MUJIN together supported the creation of a new robotics startup. We succeeded after receiving an investment from UTEC, and we will co-invest with UTEC and support innovative startups. I think we can empower a brighter future for Japan if we collaborate to shape and grow the ecosystem together.